June 20, 1956

OBITUARY

Thomas J. Watson Sr. Is Dead; I.B.M. Board Chairman Was 82

By THE NEW YORK TIMES

Thomas J. Watson Sr., who built the fabulous International Business Machines Corporation, died
of a heart attack yesterday in Roosevelt Hospital. He was 82 years old and had been hospitalized
since Sunday.

Often called "the world's greatest salesman," Mr. Watson was the company's board chairman at
his death. On May 8 he had turned over the post of chief executive officer to his son, Thomas J.
Watson Jr., who has been president since Jan. 15, 1952.

The elder Mr. Watson last appeared at his office in the subsidiary I.B.M. World Trade
Corporation, of which he was also board chairman, on May 28. The office is at 807 United
Nations Plaza.

Mr. Watson had been living at his summer home, 88 Weed Street, New Canaan, Conn., where he
was stricken over the week-end. Present when he died were his wife and their four children.

Mr. Watson was of that breed of capitalists to whom the accumulation of huge personal fortune
and the building of a vast business empire became opportunities for the spreading of huge
personal benefactions and the accomplishment of widespread public service.

To a great extent, the International Business Machines Corporation is a reflection of the
character of the man who led it to a position of eminence among the business machine
manufacturers of the world.

From the slogans that adorn its walls in eighty nations and the expenditures made form its
treasury for good works, to the methods by which it introduces recruits to what may be called the
I.B.M. way of life, the company is the creature of the man who commanded it for forty-two
years.

His was a time not so much of smoothly efficient, colorless corporate management as of
intensely personal direction. Mr. Watson led I.B.M. from an uncertain amalgam of smaller
companies to a position so akin to a monopoly that competitors and Government antitrust
officials haled it into court.

It would have cost $2,750 to buy 100 shares of the company's stock in 1914, the year Mr.
Watson took over. Anyone exercising rights accruing to those shares through 1925 would have
increased his cash investment to $6,364 for 153 shares.

Such a person would now hold 3,990 shares, and would have obtained a value of $2,164,000
based on market prices this year and cash dividends of $209,000 paid thus far.

Mr. Watson's own first earnings were $6 a week. His I.B.M. compensation, based on salary and
percentage of net profits, climbed to a Government-announced $546,294 in 1940. It was
surpassed that year only by the $704,425 received by Louis B. Mayer, motion-picture producer.

During World War II, in 1942, Mr. Watson chose to forego compensation on his company's
profits from war contracts. In 1943 the company reported that Federal and state income taxes
combined had exceeded his $427,349 compensation that year.

His 1955 earnings were $346,590.

Optimistic in Outlook

The clouds of doom never gathered on Mr. Watson's horizon. Habitually he saw nothing but the
best of days ahead. In the early days of the depression, he kept his plants going and added to his
sales force. Even during that era's darkest hours he refused to lay off factory help. Instead, he
piled up a massive inventory of parts for which there was no immediate use.

Today I.B.M. electronic computers come off assembly lines in six United States cities, and plants
are being built in two others. The company has 200 offices throughout the country. It operates
factories also in Brazil, Canada, England, France, Germany, Italy, Japan, the Netherlands,
Scotland and Sweden, and assembly plants in Argentina, Australia, Belgium, Norway and
Switzerland.

The company has 60,000 employes. Its gross assets last year were reported as $629,510,998, and
its 1955 net income after taxes reached a record total of $55,872,633.

Mr. Watson was a tall, dignified man whose impeccable, ascetic appearance failed to suggest the
variety of his interests. His activities included education, the arts, opera, sailing and horseback
riding.

He was born Feb. 17, 1874, in Campbell, N. Y., a small Steuben County community not far from
the Pennsylvania line. His parents wanted him to become a lawyer, and his father, a lumber
dealer, offered to send him to college.

Although he was later to be honored with doctorates from many colleges and universities, Mr.
Watson cut short his formal education after a course in the Elmira School of Commerce. At
Painted Post, N. Y., he took a selling job in a store that carried sewing machines, pianos and
organs.

He moved on to the National Cash Register company and rose to the post of general sales
manager. It was during this period that he coined and adopted the motto "THINK."

He and his associates were working on advertising material but could not seem to make it
sufficiently effective. To stimulate himself and others, Mr. Watson had a "THINK" sign made--
the first of thousands--and hung it in the conference room.

Slogan Always in Sight

John H. Patterson, head of the company, was so impressed with it that he ordered copies for
every office in his organization. Later, Mr. Watson made it possible for I.B.M. employes to gaze
in almost any direction without losing sight of the admonition to "THINK."

His first job with the National Cash Register Company was an itinerant salesman. Mr. Watson
was no smashing success, and after ten days on the road, during which he had not sold a
machine, he returned for a talk with his sales supervisor.

The supervisor administered a pep talk, littered with homilies of the kind that football coaches
find useful between the halves.

The effect of this conference was such that Mr. Watson was ever afterward a champion of the
catchword and of the idea that one of the chief duties of a supervisor is the encouragement of
those below him.

Mr. Watson's personal rise started when, on May 1, 1914, he assumed the presidency of the
Computing-Tabulating-Recording Company. This concern had been incorporated in June 1911.

The Computing-Tabulating-Recording Company was a small organization when he took over
with fewer than 400 employes. Its products were a punch-card tabulator, which had been
invented in time for use in the 1890 census; time clocks and other business machines. In
February, 1924, the company was merged with the International Business Machines Corporation
and assumed its name.

In talks to employes at Endicott, N. Y., and later at other installations, Mr. Watson quickly set
about expounding his ideas.

Industrial 'Family' Concept

He developed the concept of the industrial "family," whose duties were first to the customer, who
must receive good value for his money; next to the members of the "family," who must receive
proper compensation; and then to the owners of the corporation, who must receive profits.

For the customer, Mr. Watson saw to it that new machines were devised to meet new needs and
new needs were discovered to stimulate the sale of new and old machines. One of his proudest
"selling" jobs was the negotiation of a $40,000 loan, without the customary collateral, from the
Guaranty Trust Company of New York--of which he later became a director.

Most of the borrowed funds were used for the establishment of an engineering laboratory for the
development of new machines. Greatly enlarged, the corporation's laboratories have contributed
to the I.B.M. catalogue, which includes computers, machines for simultaneously weighing and
counting items, translators for the simultaneous broadcast of a speech in several languages,
intricate calculating machines and other scientific specialties.

Under Mr. Watson's management, the company long had retained ownership of its machines,
making them available under a system of annual rentals. In 1952, the Government started a civil
antitrust suit against I.B.M., charging that the corporation owned more than 90 per cent of all
tabulating machines used in the United States. Its rentals were estimated at $100,000,000
annually.

The annual rental was estimated by Government lawyers to have amounted to $250,000,000
before a consent decree was signed in Federal Court here last Jan. 25. Under this decree, the
company agreed to offer its machines for sale, to set up a separate company to service machines,
to supply parts and data to other companies servicing equipment and to release its patents for
licensing.

Mr. Watson's wide civic activities ranged from the presidency of the old Merchants Association
here to host for city celebrations for kings, presidents and dignitaries of many descriptions.

In the international area, his slogan was "World Peace Through World Trade." He had served as
president of the International Chamber of Commerce. His United Nations efforts included a gift
of a $25,000 demountable stage for the General Assembly hall here.

A recipient of many awards and degrees, Mr. Watson had been a trustee of Columbia University
for twenty-three years. Dr. Grayson Kirk, the university's president, said yesterday his interests
in the university had been wide, from the Watson Scientific Computing Laboratory, which he
established at 612 West 115th Street, to annual alumni reunions.

Was Friend of Presidents

A friend of Presidents, Mr. Watson helped to bring General of the Army Dwight D. Eisenhower
to Columbia as president. The late President Franklin D. Roosevelt named Mr. Watson United
States Commissioner General to the 1937 International Exposition in Paris. Former President
Harry S. Truman conferred the Medal for Merit on him in 1947 for his war services and in 1948
appointed him a special ambassador to the jubilee of Queen Wilhelmina of the Netherlands.

Mr. Watson's philanthropies included Protestant, Roman Catholic, Jewish and nonsectarian
organizations. In 1955, he gave $1,000,000 to the Genesee (N. Y.) Conference of the Methodist
Church. He had been active in the Boy Scouts and the Masonic organization and in art and many
other programs.

His home here was at 4 East Seventy-fifth Street. I.B.M. headquarters is at 590 Madison
Avenue, at Fifty-seventh Street.

Mr. Watson is survived by his widow, the former Jeanette M. Kittredge, whom he married April
17, 1913; another son, Arthur K. Watson, president of the foreign subsidiary; two daughters,
Mrs. John N. Irwin 2d, wife of a New York lawyer, and Mrs. Walker C. Buckner of Bronxville,
N. Y., wife of a New York investment banker; two sisters, Mrs. Richard G. Day of Schenectady,
N. Y., and Mrs. Frank B. Earl of Columbus, Ohio, and fifteen grandchildren.

A funeral service will be held at 11 A. M. tomorrow at the Brick Presbyterian Church, 1140 Park
Avenue, at Ninety-first Street. The Rev. Dr. Paul A. Wolfe will officiate. Burial will be in
Sleepy Hollow Cemetery, Tarrytown, N. Y.

Mr. Watson's body will repose at the church chapel today from 2 to 8 P. M. All company
facilities throughout the world will be closed tomorrow.